Dollar Asserts Dominance Amid Trump's Tariff Pledges

The U.S. dollar rallied as President-elect Trump pledged new tariffs on imports from Canada, Mexico, and China. Stocks fell after gains fueled by fund manager Scott Bessent's nomination as Treasury Secretary. The currency's rise was driven by market expectations of tough trade measures under the new administration.

The U.S. dollar surged against major currencies on Tuesday following President-elect Donald Trump's announcement of import tariffs from Canada, Mexico, and China. The stock market, which had previously seen gains, slid as investors reacted to the news.

Scott Bessent's nomination as Treasury Secretary had initially buoyed Wall Street, causing a dip in U.S. Treasury yields as investors flocked to bonds. The dollar, however, reversed this trend by jumping 2% against the Mexican peso and making gains against the Canadian dollar and the Chinese yuan.

Market analysts attribute the dollar's rise to Trump's intention to impose significant tariffs, reflecting concerns over illegal immigration and drug trade – a sentiment of robust currency comes with expectations of upcoming trade policies.

(With inputs from agencies.)